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tv   Bloomberg West  Bloomberg  June 10, 2014 11:00pm-12:01am EDT

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>> live from pier 3 in san francisco, welcome to "bloomberg west," where we focus on innovation, technology, and the future of business. i'm emily chang. a wave of protest is planned against ride app uber. 30,000 taxi and limo drivers are expected to take part in the rally in london, paris, and berlin. upset that they are not subject to the same rules they are. songwriters went before a subcommittee urging congress to update music royalty rules to include digital performances. witnesses told the panel that they are losing a lot of money due to the royalty rules were created in 1941.
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a second hearing will be held on the issue with executives from pandora, sirius xm, and other companies. nintendo presented at e3 today for the struggling wii u conference. splatoon, a new legend of zelda game coming next year and amiibo, allowing users to scan characters into games. and the first legally approved commercial drone flight over land happened earlier this week. it was made by a company called aerobyerman in alaska. more than 30,000 limo and taxi drivers from across europe are going to hold massive road test tomorrow against uber. scheduled in some of europe's biggest cities including london, paris, berlin, madrid, drivers
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even planning on blocking the roads. it is unfair that regulations they have to follow are not applied to uber drivers as they expand. they spoke on street smart yesterday. >> the kinds of things we think about our, can we continue our growth? can we grow in cities we are already in? if we can make it to this whole year and grow faster when we are five or six times bigger this year than we did last year, that is kind of a big deal. i've got a lot of my team that is really focused on those kinds of things. there are a lot of little things underneath to make that a reality. >> they are scheduled less than a week after they raised $1.2 billion in funding.
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they hit a valuation of about 17 billion dollars. olivia sterns is with us on the phone from london. and here in san francisco, sarah covers uber for us. what are you expecting in london tomorrow with these protests? how much is it going to snarl traffic across the city? >> they are expecting 10,000 to 12,000 cabs and taxis to show up in private protests. if they turn out, this really does have the potential to create enormous gridlock and be a huge hassle. there have been smaller protests but this is much more massive a demonstration. it takes place across europe including the airlines around the airport. it is expected to be a lot worse and can bring the city to a standstill. it gets to the heart of the issue of what is going on in
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european economies. industries are heavily regulated and what you're seeing now is sort of the crisis taking place that is needing to take place for the economies to become more competitive. that is really what the backlash is growing, the same kind you have seen against companies like airbnb. >> they spoke a bit about regulation yesterday, i understand they have run into regulatory hurdles. in berlin, it has been banned. take a listen to what travis had to say. >> customers, citizens of these cities are getting around the city much more cheaply. how does a regulator -- cheap, inexpensive transportation that
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is high-quality, you should have. with that premise, we are in 130 cities. there's only one city ever that i've pulled back from. vancouver. >> black cabs in london are no joke. they are pretty expensive. how do they stack up pricing wise? >> it's a huge hit in london. it's going to cost you about 40 pounds. it will probably cost me about 22 pounds. it is significantly cheaper. in london, keep in mind that you will take those express lanes, and if you are in a hurry, that is good news. online cities such as new york,
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you can't always pay for a taxi by credit card. that is another big example for uber. you can use your smart phone. a problem i have often. >> it is a polarizing company. this is a company that has just raised money. i talked to drivers who have lost their jobs and have a job because of uber. others could not make it as taxi drivers and switched to this instead. >> this protest is interesting because it flipped on its head the message from uber. that we are fighting the bureaucracy and giving consumers what they want. but protesters say that limousine drivers are people, too. they are not all employed by uber. a lot of people are affected by these changes.
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in the u.s., they have been able to rally consumers on their side saying that we need to bring it to our cities. this is what consumers want. it's very polarizing. >> they have run into regulatory hurdles in the united states. olivia, do you get the sense that the battle uber is fighting in europe is bigger than what they are fighting in the united states? >> this will be decided at a national level or at a municipal level. the good news for uber is that the european commission vice president and the woman in charge of competition has said that the ban was crazy. it sends a bad anti-tech message about brussels. there is a sense that there is support for disruptive new
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technologies and a clear recognition that this is a much better option for consumers. the resistance is more local but it will be decided country to country and city to city. >> thank you both. the fight between pandora and the companies that collect royalties have spilled into the halls of congress and the justice department. phil mattingly is with us now. it has been an ongoing battle in the court but washington is getting involved. we are talking about rules that were made decades ago. >> in the near term, changes are probably unlikely. unlike just about everything else in town, there is bipartisan agreement that the current system puts just about everyone at some kind of disadvantage. take a listen to what bob
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goodlatte said today. >> consumers that want to be able to easily access their favorite songs any time on all of their digital devices face a legal framework written for the world of vinyl albums and eight track tapes. >> one of the most heated battles pit pandora against broadcast music inc. and the american society of composers authors and publishers. these groups provide a mechanism for legal protection for hundreds of thousands of songwriters and publishers. their contention is that pandora doesn't pay fair royalty rates and the current law does is take into account the rise of digital music. lawmakers are keenly aware of it. that said, a timeline at this point is very unclear. >> the justice department shut this debate up with its own decision to get involved.
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>> if you want access on this issue, these groups are under consent degrees in place since 1941. they guide have these royalty rates are set. pandora has steadily look at these rates but they will review these very dated consent decreases. >> where does pandora set with all of this? >> what is interesting with pandora and all the players here, they look at them in a rational manner. the company is going to get a chance to testify later this month. they believe consent decrees as they currently stand play an important role in how this all works.
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they can step in and rule. pandora feels like any major changes would be bad for business, but it will be really interesting to see. there is a comment period and we will see where everyone stands and if any major changes will be coming into play. >> phil mattingly in washington, i know you will follow that one for us. we will be back with more "bloomberg west" after this break. ♪
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>> welcome back to "bloomberg west." i'm emily chang. target just named a new chief information security officer. he previously served that a
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similar position at general motors. the information officer is also named after that reach. they have been shuffling executives around that. marcus will be leaving ebay's mobile payment company to run facebook messenger. what does this mean for facebook's future? we are joined along with ceo of a company that recruits for facebook and others. this took a lot of us by surprise. were you surprised? this is a big talent move. >> three years into their gate, it's a lot of times -- the notion of running a 70 person
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company is different. >> is this a step up, down, or sideways? >> facebook has 14,000 employees and facebook at 7000 -- they have more users than active accounts. the cliché is true, he will have a much bigger impact. >> let's talk about the numbers. whatsapp is completely separate and there is confusion about what the relationship between facebook and whatsapp is going to be when the acquisition is done. >> it's a big question. >> if messenger becomes what facebook uses for payments, you can't imagine a better canvas.
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>> let's talk about the payments angle. could they be working on a payments product that facebook has dabbled in but not quite worked out? >> the payments are quite different. the three really hot things for facebook, payments, mobile, messaging. >> john, you recruit for facebook. they talk about speaking with mark zuckerberg and being compelled. they had to pull out all the stops. >> zuckerberg is a guy that focuses on recruiting more than perhaps any other ceo on the planet. he is recruiting for hours the day before the most important
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day in the history of the company. he was recruiting executives the day of the ipo. if you can think about the type of executive that can pull something from david and this position, he's the perfect guy. >> it does not seem like there is a succession plan in place. >> he is reporting to ebay ceo, opening up who will take that place. you are wondering what does this mean for me, but also a lot of incoming potential executives. >> is the stand-alone strategy going to work for facebook? they accidentally released slingshot which seems like a snapchat competitor. do you see this not having legs?
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>> one of the things that it offers for them is the opportunity for experimentation. if they do want to do something with payments, they can experiment in messenger. >> do you really think they released it by accident? >> that i could not tell you. one-to-one communication, not just broadcasting generally to your friends is something that facebook is really going to have to get. >> david marcus is one of the first guest on bloomberg west when we started the show three years ago. scott thompson he became the head of paypal. >> i would expect him to start another company. he does have a huge opportunity here with facebook.
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>> if you want to reinvent payments, there's no better place to do it then a place like facebook. that is probably why zuckerberg was so excited to bring him on board. >> thank you both for joining us. we will see what happens. the annual electronics entertainment expo is in full gear down and outlay. we will preview the new games being showcased next and you can watch us streaming on your tablet and phone, bloomberg.com, apple tv, and amazon fire tv. ♪
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>> welcome back to "bloomberg west." i'm emily chang. the direct purchase of directv for consumers, at&t says it plans to expand high-speed broadband service to 13 million
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locations and would not be possible without directv technology. they wanted to buy directv for $49 billion and the deal is still pending approval. let the games begin. videogames, that is. sony, microsoft, nintendo, and all the big names are in l.a. for the annual e3 gathering. let me bring in jon erlichman he was in l.a. right now and will be covering this event for us. jon, what are the highlights? >> the business story is that software helps sell hardware. last year, the big players were really unveiling their consoles. the xbox one and playstation 4 and nintendo's latest chess piece the wii u. after we have seen these devices on the market, now comes the second wave of how to get people excited about buying some of these new consoles.
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part of what you do is show them really cool games. the hard-core gamers are already owners of these various devices and games but if there is excitement or hype, maybe it carries to the more casual gamer. we certainly saw that transition from the last generation to this new generation, a lot of people just a satisfied to play games on their phones and tablets. >> what about the focus on franchise games like halo? what is the microsoft game plan? >> this was a great example. they got a lot of kudos for not just talking about the next-generation halo game but making previous versions of halo available on the xbox one. something they have not done before. a were clear about acknowledging the new gaming crowd. last year, microsoft to my earlier point was more focused
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on the entertainment power of the xbox one. >> what about virtual-reality? like facebook buying oculus. >> we will watch that story and sony buying project morpheus. >> be sure to tune in to our live coverage of e3 tomorrow on "bloomberg west." we will hear from the new head of xbox and speak to the new ceo of oculus. still ahead, the first commercial droned a flyover land. it will survey the oil field in northern alaska. coming up. >> time for on the markets. let's take a look at where stocks traded today. a very tight range for stocks. the dow and the nasdaq eking out a very small gain by the end of
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the session, he pointed to points respectively. the s&p did not make it after seven of eight sessions of gains and closing at a record yesterday. ♪
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>> you are watching "bloomberg west," where we cover innovation, technology, and the future of business. i'm emily chang. salesforce will bring brands to wearable devices with the new developing platform called salesforce wear. it helps connect to customers and employees through apps designed for devices like the samsung watch or fitbit trackers. what is your vision for salesforce wear? >> it is the first app and initiative to help develop business applications for wearables. it finds these cases in business
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and enterprise and helps them connect to customers in entirely new ways. >> i have tried many wristbands, and the thought of getting work on my wrist stresses me out. you mentioned this more as an enterprise application. you are using it in the operating room or a customer service representative can monitor calls. >> a couple of comments. as you move to a new platform, we saw buber that could not have existed without mobile phones. we will see others get developed. i think the vision is both. customer experiences in casinos and resorts, ways to provide offers and journeys for
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customers. and they will enhance productivity in sales and service. i think that is part of the division. field service workers using google glass to get coaching on how to improve or fix a product. in warehousing and manufacturing, that is where visualizations come into play. situations where your hands need to be busy. and in terms of everyday usage, it is not just putting a smartphone phone on your wrist, it is about significant use cases that are small nudges. his devices are always on, they have sensors and are connected to products and places around you. if i am running late, it lets
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everyone know i am running late. productivity enhancements will come from developers using these to build apps. >> a wearable device is a pretty simple interface right now. could all of this clutter up and make it more difficult to use and less desirable to wear? >> i think some of the apps are great and some of them are not so great. what we're trying to do is catalyze the development of those killer apps. we have built six reference apps for six leading wearable devices and we have open sourced them and given them away for free from the 1.5 million developers and the software veterans. we have given them to them and said, go create. what we want to see is what they come up with. i think it is not going to clutter it up. people will find significant use
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cases that help people become more productive and help companies connect more with their customers. >> you're working with samsung, google, fit bit. what do they tell you they need? >> clearly, all of these device manufacturers want more applications built for these devices. in this particular case, they are particularly excited about business enterprises. the fact that we are now seeing through our ecosystem that they are thinking about this, because wearables are growing really quickly. you will get a competitive advantage if you start thinking about how you connect to customers and how you make the employees more productive. start thinking about what you can do. the companies we are working
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with are overjoyed with the fact that we are entering a market with the first enterprise vendor do to something like this because we are pretty innovative. >> how closely are you watching apple for the iwatch? >> you can never predict what they are going to do but it is certainly exciting. they predicted 50 million devices if they did. apple always comes up with great products. the adoption will increase as the more it is a platform for business. >> senior vice president of emerging technologies, fascinating stuff. the first legally approved commercial drone flight over land has just happened in alaska. does that mean drones can soon be coming to a neighborhood near you? we will discuss. ♪
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>> welcome back to "bloomberg west." i'm emily chang. foxcon is best known for making apple gadgets but has big plans for robots as well. robots are the most exciting new part of foxconn's business. building a robot for japanese conglomerate softbank spoke about the potential in shanghai today. >> in the home, automation will be the center of control for the family. if you go out and forget whether you need to buy bigs, it will remind you that you are out of eggs and to buy some. they are working on standardizing these platforms and developing devices. the important thing is developing application software. this is what we are trying to cooperate on with our clients. >> working closely with elon musk and gave no details on
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that. the faa just gave bp permission to fly the first commercial drone over land. bp is working with drone manufacturer aerial surveys -- they flew a drone on sunday to survey bp pipelines, roads, and equipment. the largest oil sales in the united states. the vice president of marketing strategy, thank you so much for joining us. how did the first survey go? >> we have been working on this for quite some time. we did a number of demonstrations. they proved the technology out and continuing to advance it in the military domain. this is a landmark moment for this industry and a number of
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industries globally. >> i understand you have brought a drone with you today. show it to us and talk about the potential for drone technology in your line of work. >> i brought with me the wasp uas. we call it unmanned aircraft system. this has as much technology as a private plane piloted by a person. all kinds technology related to navigation, autonomous operation. like the system operating in alaska, this is designed to provide information. it is turning bridges and pipelines and roads and crops into 0's and 1's to help people make better decisions. >> how quickly do you expect the faa to move?
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>> our hope is that if you continue to demonstrate success in alaska, there will be more confident in the technology and the ability to take it to a lot of different places and benefit a lot of different industries. >> let's talk about your confidence in the technology and safety. how can you ensure there will not be any problems? >> our approach is a mission services business model. we take our expert operators, many of whom come from the military and use this technology extensively there and put them into the customer side so that our people are the ones operating the unmanned aircraft systems and delivering advanced information to customers. we view safety as the highest priority.
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they are trained to operate with the local air traffic controller authorities to make sure that everything happens in a safe fashion. >> we are looking at a hummingbird. is that a kind of drone? >> a technology development project contracted by darpa. we produced the first aircraft of its kind. a six-inch wingspan with less than a aa battery. it can fly inside, you can imagine a collapsed holding for example. it can find people that need help. >> what about the potential for consumers to benefit from this technology like amazon delivering? is that more of a far out pipe dream or is that really realistic in the near-term?
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>> we think there are an unlimited number of ways that unmanned aircraft can benefit companies, agencies, and individuals. we are at the beginning of that. we will see more of these types of devices, helping companies operate more effectively and productively and ultimately helping consumers in ways that are important to them as well. >> we see google, amazon, and facebook investing in drones. how do you see it playing out with technology companies and smaller companies like yours? >> we think of ourselves more of a technology company and innovative solutions company. we have seven vehicles that make up 85% of the pentagon fleet of
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unmanned aircraft. the market that is now beginning to emerge, we are approaching it with mission services. we have established and introduced brand-new capabilities that delivers higher fidelity and higher resolutions that have the potential to transform a large number of industries. as a technology company, we see technologies out there on the small side and also the unmanned aircraft that we also make. it's a wide open space and we are excited to be in a leading position. >> vice president of marketing strategy, thank you for sharing your story with us today. we are learning that google has agreed to by skybox imaging for $500 million in cash. it will help keep google maps accurate and up-to-date with their images.
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google is hoping to use skybox technology to improve internet access and disaster relief efforts. what is the next big thing in live events? we will talk about consumer spending and what is impacting the company's growth, next. ♪
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>> welcome back to "bloomberg west." i'm emily chang. one of the hot topics around san francisco is the evolution of the consumer and how people are using technology to spend their money. one trend in event ticketing is a very popular site looking at how people are using technology to find others with similar interests to connect with off-line. i sat down at the next big thing summit in california and asked her how isn't bright is capitalizing on that.
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>> the next big thing is creating a destination where you can go to find anything to do at any location. what we're finding is that consumers want hyper relevancy. they want to live a better life and be fulfilled by life experiences. there is this interesting bragging moment when you're posting on a cycle. >> you say you are taking on ticketmaster or stub hub. are you changing your tune now? >> it is easy to outline an incumbency market by talking about the 800 pound gorilla. certainly ticketmaster and stub hub is in our line at all times. the grand vision is a step along the way. what we found is that internationally, the long tail
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keeps getting longer. it is a huge opportunity for us and we had a million events last year alone. >> you have always had an ipo in your future. maybe not right now. a lot of companies are raising money at high valuations. what are you thinking? >> we are focused on becoming that destination side for consumers, making sure that it is really convenient for our consumers. when you look at being the world marketplace, that opportunity is huge. we hope that opportunity keeps getting bigger and bigger. we want to match the opportunity with the time and also with our own people and resources to make sure it is the right time for us. >> uber just raise money at an
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$18 billion valuation. is it eye-popping to you? do you understand it? >> i don't think we have seen the breadth of innovation. the things we're doing with bitcoin, curing cancer, cars and transportation. the capital mast with these great innovations, i don't know. i don't know about who is overvalued or undervalued. i think there are great opportunities and it is an impressive time to take advantage of the capital that is out there. >> what about the word bubble? >> we are building a business that will be here bubble or no bubble for the long haul. we are respective of the market environment. >> i feel like we should ask
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you, we just had a provocative debate about the state of inequality. you guys are based in the city. as you have observed the protests against google buses and rising housing prices but created a lot of jobs, what is your position on what the problem really is? >> i don't have a strong take on what the problem is because i think it is a confluence of factors. i know what the solution could be, giving young and upcoming startups that are building businesses in the city an opportunity to get back and connect with the city. we talk about how we want to be part of the solution but i don't think it is simple like volunteering. there needs to be conversation about how we can band together. >> there is not enough coordinated effort? >> i would love to see the ideas
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that we as a young company can follow in the path of those that made a difference. >> and you have done work with the city already. >> bright impact that started go out and spend time. we just volunteered with the elementary school. the tipping point is the huge partner of ours. we feel like we're getting more and more connected to the community but it is fragmented. how we coordinate our efforts is really the question on my mind. >> do you think that that community is being unfairly targeted? >> i think we have the power to put our minds together to be part of the solution. i think we should have that pressure on us. >> julia hartz, cofounder and president of eventbrite. jon has the byte in l.a.
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>> 1.2 million. the number of copies of mario kart eight sold by nintendo in the first weekend of late may, a pretty encouraging number. it was generally a disappointing story with the wii u. we talked about e3 conference in l.a., and most of the console talk to surrounding microsoft and the xbox one and sony and the playstation 4. for nintendo, the wii u has struggled to stay part of the conversation. >> you think mario has the potential to help save nintendo on his own? >> yes. yes, he definitely does. so many people love the characters that nintendo has made, you know, historic over the years. one of the things we have heard is nintendo taking a page out of the book of sky landers and is the infinity, having collectible versions of mario and other
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characters that can basically make the characters interactive. that is the power of what they've gotten. >> we touched a bit on virtual reality earlier. what are you looking forward to most from e3? >> because we have this conversation of facebook versus sony with both of them obviously so interested in virtual reality with facebook's purchase of oculus. given the position of virtual reality future that is more about communication, does that open the door for sony to grab some real estate in gaming and encourage game developers to come to their platform? we will be looking for more details on that front. >> jon erlichman at e3 tomorrow. get the latest headlines on your phone, tablet, bloomberg.com and bloomberg radio. thanks for watching this edition of "bloomberg west." we will see you later. ♪
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